Coast Panel OKs Green Dragon Demolition : Preservation: Permit to finish the job is approved after owners agree to allow the salvage of materials.

Fifteen months after bulldozers destroyed most of La Jolla’s historic Green Dragon Colony, the California Coastal Commission on Tuesday formally issued a demolition permit allowing the completion of the job.

The permit was issued after the owners agreed to allow materials from the site to be salvaged and that any future development will adhere to “significant” design elements of the original cottages, which were considered exemplary of the Arts and Crafts movement.

The Green Dragon Colony was built near the turn of the century and was a haven for artists and writers who flocked to La Jolla.

Most of the cottages on the hillside overlooking La Jolla Cove were destroyed in June, 1991, after the city had issued a demolition permit.

But the demolition was halted by a temporary restraining ordered issued by a San Diego Superior Court judge after the state attorney general’s office argued that the owners of the property, a trust headed by architect Robert Mosher, had not received permits needed from the state.

Under the terms of the new agreement, there will now be a 90-day period for “qualified” organizations in the field of historical preservation to come forward to claim the materials that litter the partly demolished site. After the 90-day period and an archeological study of the property, the owners will be free to complete the demolition.

“The ultimate resolution by the Coastal Commission was an appropriate and valid decision,” said Marie Lia, an attorney representing the trust. “I just wish it could have been reached in a much shorter time and at less cost to the property owner.”

Local architect Tony Ciani, one of the most outspoken advocates of preserving the site, said he was “pleased” with the Coastal Commission’s settlement, particularly the guidelines for any future projects on the site.

“Now what we have to look forward to is a development that recognizes the historical character of the site,” Ciani said.

As part of the agreement, an applicant to build on the property would have to fund a feasibility study to determine “the appropriate type and intensity of use” for the 40,000-square-foot site.

In June, a partnership headed by Don Allison bought the site for $5.5 million. The partnership also owns the neighboring Coast Walk restaurant and shopping development.

Allison said the new owners were not involved in the negotiations with the Coastal Commission, and that they inherited the agreement when they bought the property.